The return of Nokia: The story continues...

After years in the wilderness, Nokia is back with a bang. What will it take to recapture the glory days?Ravi Balakrishnan | ETBrandEquity | July 12, 2017, 09:19 IST

In 2014, on the very day Microsoft announced it was discontinuing Nokia, Brand Equity’s Most Trusted Brands survey hit the stands with the Finnish mobile brand at No 2. Its performance on a day when the brand was being taken to the proverbial woodshed to be shot in the head, spawned an entire week’s worth of online snark. Mainly from people whose last brush with Nokia was a good three or four mobile phones ago. But it revealed what India, including the not-so-affluent population from cities across the country, thought of the brand, and the trust they had in it.

And yet, the decision to bring Nokia back seems quixotic, at first glance. In the intervening years, it has become a byword for corporate hubris. It had a 64% market share in India through 2008-2009 according to a report from Voice & Data. It spent the next few years steadfastly ignoring dual SIM phones nibbling away at the lower end of the market. iPhone and, later, Android made a clean sweep of the top to the mid-segment. In a world quickly jumping aboard Android, Nokia picked Windows Phone, got acquired by Microsoft and saw its brand disappear, replaced by Lumia. ‘Nokia-ised’ slipped into the informal lexicon of marketing when talking about a company so enamoured of its success, it takes its eye off the ball (We personally prefer Blackburied, but you get the picture.)

For its return though, Nokia intends not making the same mistakes. It’s relying on what Ajey Mehta, vice president India for HMD Global calls “An asset light business model based on partnership.” Included in this partnership are Google for a pure Android experience and manufacturing partner Foxconn. Mehta cites a study by Trust Research Advisory which claims Nokia has 95% awareness and strong consideration among smartphone users. Mehta and his team have been kept busy by the launch of N3, a modestly priced Android smartphone. He’s been meeting distributors, retailers and setting up Nokia Mobile Care centres, an attempt at replicating one of the most extensive service networks in mobile phone history. Nokia 5 and 6 are scheduled to launch later this year.

However instead of going the pure smartphone route, Nokia is taking a stab at feature phones too. It relaunched its flagship 3110, a rugged dual SIM feature phone, for people who believe Snake is the acme of mobile gaming and the main use for a device ought to be calls and SMS. Is there more to this than just a quick cash-in on nostalgia, we wonder?

HMD claims a solid business case for feature phones, a 1.3 billion unit strong market. A report from Counterpoint Research estimates “close to 60 million 4G capable feature phones could ship this year globally, up from almost a million units last year; with India potentially contributing to almost half of that this year.” Says Pekka Rentala, chief marketing officer at HMD Global, “We are not going on a nostalgia trip. We are looking forward to the future, even if, every now and then, we selectively look back to history, take some iconic models and modernise them.”

Nokia is betting big on its offer of a more secure, frequently updated pure Android experience, currently available only in Google’s pricey Pixel. And on what made the brand famous back in its heyday: rugged, robust design.

On the marketing front, Nokia believes its emotional appeal will win over consumers at a time when most phone advertising is dominated by tech descriptions and spec sheets. Riffing on its connecting people theme, Nokia is currently going with #UniteFor. Says Jyotsna Makkar, CMO at HMD Global’s India operations, “It’s a rallying cry to align behind what matters: whether its community or friendship. A reminder that technology can be a social catalyst to bring people together.”

But will all of this work? Nilesh Gupta, managing partner of Mumbai-based retailer Vijay Sales believes Nokia stands a chance. “If they play the cards well, and get price and product right, they could get 16% to 18% marketshare in six months,” he predicts, adding, “They wouldn’t have to spend as much as the current players, maybe only 35% to 40% of their budgets. If you have to buy a phone for mum or dad or uncle or aunt, they’ll be happier with a Nokia.”

Another huge advocate of the brand is Viral Oza, former marketing director at Nokia and currently CMO at Lodha Group: “Very few brands evoked that kind of emotional connect. One can argue Apple is another such brand, but a connect in spite of ups and downs is not something Apple has seen and so it’s not an apple to apple comparison.” He considers the excitement and nostalgia evoked by 3310 a brilliant move and recommends, “They identify the right hooks and peg the launches on these. If they do that, they will have a good chance. Not like the old days of 40% share, but in the current context.”

Nokia’s second coming has an air of once bitten twice shy. Unlike Motorola which came out swinging, expecting its customers to fork out not just for the device but an entire ecosystem of enhancements and assorted gewgaws, Nokia’s folio, at least in these early days, errs on the side of being conservative. Maybe Moto’s enhancements will be as relevant as a laser disc player; or maybe they are just a couple of killer apps away from being the next big thing.

It’s hard to know unless one tries, but Nokia appears in no hurry to try. A significant number of users have shown they value the skins, mods and Android OS tweaks by companies like Xiaomi and One Plus, which makes one slightly sceptical about the number of takers for a pure Android experience. What Nokia needs is an appetite for risk and going out on a limb, else it runs the risk of missing where the rest of the industry is headed. It wouldn’t be the first time that happened to Nokia, but it may well be the last.